Correlation Between Hologic and VOLKSWAGEN
Can any of the company-specific risk be diversified away by investing in both Hologic and VOLKSWAGEN at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Hologic and VOLKSWAGEN into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hologic and VOLKSWAGEN AG VZ, you can compare the effects of market volatilities on Hologic and VOLKSWAGEN and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Hologic with a short position of VOLKSWAGEN. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hologic and VOLKSWAGEN.
Diversification Opportunities for Hologic and VOLKSWAGEN
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Hologic and VOLKSWAGEN is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Hologic and VOLKSWAGEN AG VZ in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VOLKSWAGEN AG VZ and Hologic is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Hologic are associated (or correlated) with VOLKSWAGEN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VOLKSWAGEN AG VZ has no effect on the direction of Hologic i.e., Hologic and VOLKSWAGEN go up and down completely randomly.
Pair Corralation between Hologic and VOLKSWAGEN
Assuming the 90 days horizon Hologic is expected to generate 0.63 times more return on investment than VOLKSWAGEN. However, Hologic is 1.58 times less risky than VOLKSWAGEN. It trades about 0.01 of its potential returns per unit of risk. VOLKSWAGEN AG VZ is currently generating about -0.02 per unit of risk. If you would invest 7,086 in Hologic on August 24, 2024 and sell it today you would earn a total of 264.00 from holding Hologic or generate 3.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hologic vs. VOLKSWAGEN AG VZ
Performance |
| Timeline |
| Hologic |
| VOLKSWAGEN AG VZ |
Hologic and VOLKSWAGEN Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hologic and VOLKSWAGEN
The main advantage of trading using opposite Hologic and VOLKSWAGEN positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hologic position performs unexpectedly, VOLKSWAGEN can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in VOLKSWAGEN will offset losses from the drop in VOLKSWAGEN's long position.| Hologic vs. Retail Estates NV | Hologic vs. AECOM TECHNOLOGY | Hologic vs. X FAB Silicon Foundries | Hologic vs. RETAIL FOOD GROUP |
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Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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